Sirius XM
Sirius XM (SIRI) satellite radio was supposed to be one of the most successful consumer electronics devices of all time. A subscriber would be able to listen to more than 100 stations coast-to-coast in either a moving vehicle, or using a portable version of the device. Initially, the service planned to run no commercials. One of the two companies that would eventually be the merged Sirius XM was XM Satellite Radio which launched its service in September 2001. At the end of the year, the company had almost 28,000 subscribers, a figure that jumped to about 350,000 by the end of the 2002 and 5.9 million by the end of 2005. Over this period, the company accumulated hundreds of millions of dollars of debt in order to cover capital expenses, operating deficits, and sales and marketing costs. Analysts expected the company to be extremely profitable once it reached subscriber levels of more than 10 million. The business was growing so quickly that this goal seemed a foregone conclusion. Rival Sirius launched its service in July 2002. Over the next five years, it would have fewer subscribers than XM but would grow nearly as fast. Sirius also took on tremendous amounts of debt to support its operations. As both companies ran low on money, they announced a merger on February 17, 2007. The FCC reviewed the request for thirteen months while the companies were bleeding cash. Subscriber growth had slowed, most likely because of new and more popular consumer electronics devices like the Apple iPod and multimedia cellular handsets. Shares in Sirius, which had traded at $63 in 2000, dropped to $.05 earlier this year. In the first quarter of 2009, the number of subscribers for the combined service declined by 400,000 from the previous quarter to 18.6 million. Neither Sirius nor XM ever made a dime.
—Douglas A. McIntyre